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WHAT YOU NEED TO KNOW
China warns Canada to ‘abandon prejudices’ after Ottawa blocks Aecon deal
The federal Liberal cabinet has blocked a Chinese state-owned enterprise’s $1.5-billion takeover bid of Canadian construction giant Aecon on national security grounds. The sale of Aecon, based in Toronto, had been opposed by its industry rivals as well as former senior intelligence officials at CSIS, Canada’s spy agency. The Liberals accepted the findings of a national security review, which found that the takeover bid by China Communications Construction Co. Ltd., one of the world’s largest construction companies, was not in the national security interest. China responded by warning Canada to “abandon prejudices and create a level playing field for Chinese enterprises.” In recent years Chinese companies, many of which are controlled by the state, have engaged in a spending spree across the world in search of assets and technology. Canada and China have explored pursuing a trade deal and the decision by cabinet complicates talks.
Wesley Wark writes in a column that the decision was a test of the national security review process: “ Aecon’s intended master was a Chinese company with close ties to the Chinese government and engaged in global infrastructure projects, including controversial defence installations, on a massive scale, sometimes with a dubious record. The deal did not smell sweet, however much its backers attempted to dismiss concerns about the takeover. ”
If you’re interested in getting caught up on why the Aecon deal matters and why it fell through, we’ve built an explainer on the topic.
Doug Ford involved in sale of fake Tory memberships in 2016, Liberals say
The Ontario Liberal Party has released a recording in which Ontario Progressive Conservative Leader Doug Ford is purportedly selling false memberships in 2016 for Kinga Surma, who is now a candidate for the party in the Toronto riding of Etobicoke Centre. Mr. Ford was not the leader at the time but he knew Ms. Surma, who was an aide at Toronto City Hall during his late brother Rob Ford’s mayoralty. The recording was released this morning by the Liberals’ campaign co-chair Deb Matthews and features Mr. Ford saying “Kinga is running. It doesn’t cost ya anything, we’re just signing people up today. That’s it.” Memberships to the party cost $10 annually and must be paid by the member. This incident is the latest in a string of questions the Ontario PCs have faced about nomination races ahead of the June 7 election. Brampton East candidate Simmer Sandhu resigned after his former employer, the company that runs the 407 toll highway, said personal information had been lost in a data breach. Mr. Sandhu denied any wrongdoing.
Elizabeth Renzetti writes in a column that things would have been different under Christine Elliott: “ Would Ms. Elliott have waged a better campaign than Mr. Ford, whom she defeated in total votes and number of ridings in the leadership contest, yet lost to anyway thanks to the PC’s convoluted point-distribution system? Let’s put it this way: She could hardly be worse. The chances are that her campaign would have been quietly competent, its platform well-planned, its minor fires doused immediately. The PC’s huge early lead – one poll just after the leadership vote had them with 44 per cent of support to the governing Liberals’ 23 per cent – would not have been squandered.” (for subscribers)
Trump calls off meeting with North Korea’s Kim, warns U.S. military ready
U.S. President Donald Trump has called off what was expected to be a historic summit with North Korea’s Kim Jong-un. The two leaders were supposed to meet next month in Singapore but Mr. Trump announced his withdrawal, citing “tremendous anger and open hostility” in a statement from North Korea that called U.S. Vice President Mike Pence a “political dummy.” Mr. Trump also warned that the United States military was prepared to act in the event of reckless behaviour by North Korea. Earlier in the day North Korea demolished tunnels at its Punggye-ri nuclear test site, which the regime says is proof of its commitment to end nuclear testing. The two Koreas had experienced a period of relative peace after Mr. Kim met with South Korean President Moon Jae-in last month. It is unclear what happens from here for the relationship between the U.S., North Korea and South Korea.
You can read the full text of Mr. Trump’s letter to Mr. Kim in which he officially cancels the summit here.
Retail and business banking help RBC and TD weather slowed mortgage market
Royal Bank of Canada and Toronto-Dominion Bank, Canada’s two largest commercial banks, were buoyed by their retail and business banking arms amid a slowing mortgage market. RBC and TD both surpassed their earnings expectations when they reported second quarter results today. RBC reported a profit of $3.1-billion for the quarter that ended April 30, up from $2.8-billion a year earlier. TD reported a profit of $2.9-billion, up from $2.5-billion during the same quarter in 2017.
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MARKET WATCH
Toronto stocks ended lower Thursday as oil prices slid, and after U.S. markets dipped after President Donald Trump cancelled a planned summit with North Korea’s Kim Jong-un and ordered a probe of auto imports, while gains in Netflix pushed its market value to a record. The Toronto Stock Exchange’s S&P/TSX fell 0.13 per cent to finish at 16,113.62. Meanwhile, U.S. stocks ended down slightly. The Dow Jones Industrial Average fell 0.3 per cent to close at 24,811.76, the S&P 500 lost 0.20 per cent to end at 2,727.76 and the Nasdaq Composite dropped 0.02 per cent to finish at 7,424.43.
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WHAT’S TRENDING ON SOCIAL
TransLink, the transport authority for Metro Vancouver, has paused its promotional campaign featuring Morgan Freeman after allegations of inappropriate behaviour and sexual harassment emerged about the actor.
TALKING POINTS
Does Canada’s bill to protect military victims go far enough?
“Earlier this month, the federal government tabled bill C-77, which establishes a Victims’ Bill of Rights in the military that will mirror the protections that already exist for Canadian civilians, with one additional provision: a Victim Liaison Officer to help shepherd the victim through the justice process. This is a laudable step for the Canadian Armed Forces as it works to take on the pernicious problem of sexual assault in the military. However, having served in the U.S. military when the United States was struggling with legislation to help tackle the same problem, I wonder whether this bill goes far enough.” — Lindsay Rodman
Shrinkflation: Why the food packages you buy at the grocery store continue to become smaller
“Pricing in the food processing sector is intricate. Ingredients, energy costs, wages and so forth can burden food manufacturers as they try to cultivate relationships with grocers and retain market shares. For decades the shrinking-package strategy has been part of the food industry. This can be seen in items such as chips, ice cream, cookies, pasta and chocolate bars. But packages are now shrinking even faster than ever before. The tactic is so widespread that some are calling it shrinkflation.“ — Sylvain Charlebois
LIVING BETTER
Itching to get your gardening gloves on and start digging? Longing to dust off the patio furniture and enjoy the warm weather? Get inspired with our curated roundup of gardening tips, advice and how-tos. (for subscribers)
LONG READ FOR A LONG COMMUTE
Us too: Eight women share their stories of sexism, harassment and assault
Report on Business Magazine reached out to dozens of organizations and individuals to find women willing to share their Me Too moments. We found eight women who told us their stories, ranging from subtle (and not-so-subtle) sexism to outright assault at work.
Evening Update is written by Mayaz Alam and Kristene Quan. If you’d like to receive this newsletter by e-mail every weekday evening, go here to sign up. If you have any feedback, send us a note.